Challenges of development


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Challenges of development

  1. 1. Challenges of Development<br />
  2. 2. What is Development?<br />Development –<br />Significant and measurable economic growth.<br />The emergence of social, economic, and political institutions.<br />What is the difference between Development and Growth?<br />Growth –<br />Quantitative increases in economic activities.<br />Infrastructure<br />How do we measure Growth?<br />GNP and GDP<br />Easy to do?<br />UN’s – HDI Index<br />
  3. 3. GNP & GDP of states around world<br />1. United States: 12.970 billion<br />2. Japan: 4.988 billion<br />203. Guinea Bissau: .28 billion<br />Global GDP (in millions)<br />World: 58,133,309<br />USA: 14,256,300<br />Japan: 5,067,526<br />China: 4,909,280<br />Kiribati: 130<br />
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  5. 5. Most countries/economists use GDP to measure economic performance.<br />Not always easy to measure in developing countries<br />What to include? <br />
  6. 6. GDP is not enough…<br />Economic development does not equal social development. <br />How to measure human development?<br />Human Development Index<br />Access to health care, housing, education, proper nutrition, safe environment an overall improved quality of life, enjoyment of freedoms. <br />
  7. 7. Human Development Index<br />Measures the quality of life people experience<br />Developed by United Nations Development Program (UNDP)<br />Formula includes: life expectancy at birth, income, literacy, and access to education. <br />Gender development index: concentrates on inequalities between women and men<br />
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  9. 9. Role of Government<br />Governments may promoted or impede development. <br />Close relationship between economic development and political development.<br />Government Institutions: provide the essential framework within which development occurs; Determine the rules of the game<br />Many societies fail to make economic progress because of weak institutions<br />
  10. 10. Theories of Development<br />Theory: predicts how humans behave or how things work in the world under certain circumstances<br />Development Theory: Attempts to explain how countries achieve specific economic and political improvements<br />
  11. 11. Modernization Theory<br />All societies go through similar stages of development<br />Embraces Free-market capitalism<br />Dominant theory in 1950’s and 1960’s<br />Western Europe and US as model<br />Treated Africa, Asia and Latin America as homogenous mass<br />
  12. 12. Types of Societies<br />Traditional Society: self-sufficiency, loyalty to family, strong kinship, weak institutions, low literacy levels and tech. widespread superstition. <br />Transitional: traditional and modern characteristics. Political institutions emerge, literacy increases, less focus on agriculture<br />Modern: Westernized, achievement oriented, urban, literate, high quality of life<br />
  13. 13. Marxist Theory<br />History of society is history of struggle between those who control wealth (Bourgeoisie and Proletariat)<br />Economic development is determined and controlled by the govt. <br />After economy is developed,<br /> state will wither away<br /> since no need for govt. <br />
  14. 14. Dependency Theory<br />Influenced by Marxist emphasis on class conflict.<br />Three classes of countries<br />Core<br />Semi-Peripherey<br /> Periphery<br />Capitalism reinforces dependency and economic inequalities<br />Advocates cooperation among poor countries and import substitution. <br />
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  16. 16. Other Theories<br />Third World and African Socialism<br />Opposes Marxism and Capitalism draw upon African traditions of communalism and humanism<br />Community and Grassroots Development<br />Bottom up approach (Grameen Bank). Traditional values used to promote economic growth & equity. <br />Feminist Theory<br />Focus on women’s empowerment, active participation in economic development and improved social, economic and political conditions<br />
  17. 17. What influences development?<br />Values of Leaders and Citizens<br />Why would this matter?<br />Iran<br />Asia: Confucianism<br />Natural Resources<br />Are natural resources enough?<br />Why is an “agricultural revolution” important?<br />Natural Disasters<br />Impede or reverse development<br />
  18. 18. Population<br />
  19. 19. Population<br />Small population can discourage investments and prevent realization of economies of scale<br />Overpopulated countries are generally poor<br />Population of India grows by 48,000 a day<br />Rate of population change threatens earths carrying capacity<br />
  20. 20. Education and Health Care<br />Education challenges traditional values and social arrangements, empowers women, helps farmers. <br />Poverty reinforces health problems<br />Loss of workforce to AIDS<br />
  21. 21. Political Instability<br />Forces best educated and most talented to leave<br />Increases risks for investors, destroys property, disrupts agriculture and industrial activities. <br />Destroys infrastructure<br />Biafra in Nigeria <br />
  22. 22. Corruption<br />Drains resources away from public services and infrastructure projects<br />Bureaucratic Corruption<br />Makes everything more expensive<br />institutions are weakened<br />
  23. 23. Why is Corruption so Pervasive?<br />No accountability and lack of good governance<br />Employment in govt. is about personal gain<br />Economic hardship<br />Average persons use officials corruption to justify personal corruption<br />Values<br />Government Control of Economy<br />
  24. 24. Debt & Foreign Aid<br />Trapped in Debt from foreign aid and loans.<br />Reliance on International Monetary Fund<br />IMF determines state’s economic policies. <br />Despite substantial aid, most recipients fail to develop<br />